Michigan Non-QM Loans & Mortgages
from Locked-IN Lending, LLCAt Locked-IN Lending, LLC, we can help you purchase a home in Southeast Michigan without traditional methods. Non-QM loan products allow you to qualify for a mortgage using better representations of your reliability as a borrower. Better representations may include your bank statements, any liquid assets that you have, or even your credit history. It doesn’t matter if you are a first-time buyer, an existing home owner, or a real estate investor, we can help you.
Borrowers in Michigan are used to qualified mortgage (QM) loans, but we can help you acquire a non-QM loan. These loans in Oakland and Macomb County have more flexible qualification requirements. These requirements can include bank statements, even as little as a single month’s bank statement. We can utilize asset-based loans which leverage your existing assets such as checking or savings accounts, investment accounts, or money market accounts.
Non-QM loans are for those that don’t necessarily fit into the “normal” categories typically for fixed rate mortgages and adjustable rate mortgages. Specialty loans are those with generally reduced amounts of paperwork, often great for self-employed borrowers. Balloon mortgages also fall into this category, which are those type of loans that have a fixed rate and monthly payment for a set amount of time, at which point the balance of the mortgage loan is due. For those borrowers in Michigan with low to moderate income, community loans can assist by requiring a low down payment, little to no cash reserves, and often have lower mortgage insurance premiums.
Non-Qualified Mortgages allow borrowers without perfect credit such as a bankruptcy, loan in collections, or dings on their credit reports to receive a mortgage. Although the borrowers of Non-QM loans may be considered riskier by traditional lenders, these types of mortgages aren’t necessarily high-risk loans; they just don’t meet QM standards.
Non-Qualified Mortgages
- One of the fastest growing types of home financing.
- Fill in gaps left by traditional lending options and programs.
- Give more borrowers access to mortgages.
- Helps lenders view a borrower’s overall financial situation and history.
- Take ability-to-repay into account.
- Good for limited personal income mortgages.
- Sometimes called bank statement loans or bank statement mortgages.
- Helpful for borrowers that have non-traditional income.
Non-QM Home Loan Eligibility
Income and Employment
Unlike traditional, or QM home loans, Non-QM home loans often do not require employment or a minimum income level. Generally, these type of mortgages require 3-6 months of liquid assets to be available after you close on the house or property.
Credit Rating
Non-QM home loans may have slightly higher interest rates for credit scores under 700, but are generally available for those with credit scores of at least 500. One calculation that Non-QM loan lenders take into account for companies is known as the debt service coverage ratio, or DSCR. Lenders generally want this number to be above 1.3. In short, it is quick calculation of a firm’s available cash flow divided by current debt obligations.
Down Payment
Although many fixed rate mortgages and adjustable rate mortgages don’t have a minimum down payment, Non-QM home loan lenders require a minimum down payment of 20%. However, many lenders offering Non-QM mortgages have differing loan programs and requirements.
Non-QM Loan Features
- Lengths with loan terms of 30 years or less
- Points and fees that are 3% or less than the total loan amount
- Interest-only, balloon loans, or no negative amortization
- Greater underwriting flexibility
- No personal income calculations
- No job history required in some cases
- As little as 5% own money down
- No required reserves in some cases
- Credit scores as low as 620
- Rental income can be counted
Buying an investment property in another state? We can help you get a Non-QM mortgage in other states.
Get the right mortgage for you Locked-IN today.